An Empirical Study of Isolating Mechanisms in UK Companies

Abstract

Isolating mechanisms have been developed in the literature as intellectual constructs to explain competitive barriers at the individual firm level. They are defined as idiosyncratic features of a firm's management that create barriers to competitive imitation, contributing to competitive advantage and company performance. Although presented as intellectual constructs, they can be proactively employed by companies to impact on performance. However, there has been no empirical testing of these potential benefits. In the current empirical study a set of isolating mechanisms is operationalised, and their impact on performance is tested in a sample of UK companies. Through the application of structural equation modelling, a multidimensional approach to isolating mechanisms is found to be appropriate for building a competitive advantage to impact on performance, while isolating mechanisms are confirmed as multidimensional constructs. Directions for further research are also recommended.